SCA Budget and Governance Quiz

A government agency in the UAE responsible for regulating securities and commodities markets.

The SCA reports to the Cabinet of Ministers every six months on market activities.

The SCA's chief executive is appointed by a federal decree, based on the board's proposal.

The SCA's annual budget is prepared by the chief executive and approved by the board.

The SCA derives revenue from government funding, listing fees, trading fees, and fines.

The SCA is required to maintain accurate financial records and undergo audits by statutory accountants.

Federal Law No. 4 of 2000 established the framework for securities and commodities markets in the UAE.

Markets in the UAE can be local public establishments or public joint-stock companies, all requiring SCA licensing.

The market's primary governing body responsible for overseeing its operations and ensuring compliance with regulations.

The market's top executive, accountable for day-to-day operations.

A minimum number of board members required to be present for a meeting to be valid.

The process of ensuring fairness in securities and commodities trading.

The act of publishing information to the public, ensuring transparency in market operations.

The market's annual financial summary, reflecting income and expenses.

The ability to delegate specific responsibilities to lower-level officials within the market.

Specialized units within the market focused on specific areas like trading, monitoring, or research.

A board meeting is considered valid if at least half of its members are present, including the chairperson or their deputy.

The chairman has the deciding vote in case of a tie during a board meeting.

In urgent situations, the chairman can make a decision without a board meeting, but they must present it for approval at the next meeting.

External experts can be invited to attend board meetings to provide their opinions and knowledge, but they do not have voting rights.

The board can create permanent or temporary groups to handle specific tasks.

The board is responsible for appointing the chief executive of the SCA.

The chief executive of the SCA reports directly to the chairman of the board.

The minutes of each board meeting must be signed by the chairman and the minute taker.

CISI members must adhere to both the written rules and the underlying principles of the Institute.

These principles highlight the responsibilities CISI members have towards individuals and organizations affected by their actions.

When faced with ethical dilemmas, members should consider honesty, transparency, fairness, and impartiality in their decision-making.

Maintaining the highest level of professionalism and integrity in all actions, both personally and professionally.

This principle emphasizes the importance of upholding the reputation of oneself, one's organization, and the broader financial services profession.

CISI members must uphold the highest professional standards, acting with integrity, honesty, and due diligence in their work.

This principle calls for responsible behavior in all aspects of work, including online interactions.

CISI members have a responsibility to avoid any actions that could harm the reputation of their organization, their professional body, or the broader financial services industry.

Disciplined management structure ensuring company objectives are achieved through responsibilities assigned to boards, management, shareholders, and stakeholders.

The guide aims to simplify regulations, setting clear rules for companies to follow.

The SCA acts as the supervisor, overseeing the implementation of the guide.

A set of principles and objectives that define the guide's framework and ensure its implementation.

The guide focuses on providing clear instructions and controls for companies to follow.

Article 2 of the guide details the essential principles and objectives that guide the implementation of corporate governance within companies.

Article 4 outlines the responsibilities of various stakeholders, including board members and management, in ensuring effective governance.

The SCA's Board Resolution No. 03 of 2020 formally adopted the Corporate Governance Guide for Public Joint-Stock Companies.

Entities required to be members include licensed brokers, companies with listed securities, and any other entity whose securities are listed on the market.

The register keeps track of all members of the market. It's like a membership list!

The SCA, or Securities and Commodities Authority, must be notified within a week of a new member joining the market.

Members must follow instructions given by the market, the law, and related regulations.

The members of the market who have paid their dues form the General Assembly, which is like a big group meeting for decision-making.

The General Assembly's job is to monitor the market's overall health and suggest ways to improve it, which are then sent to the SCA for review.

The market's board of directors, along with the SCA, sets the rules for how the General Assembly meets and makes decisions, including how they vote.

The board of directors, with the SCA's approval, creates a code of conduct for brokers, which includes inspections to ensure they're following the rules.

Federal Law No. 4 of 2000 established the legal framework for the securities and commodities markets in the UAE, creating a foundation for the SCA's regulatory role.

The board of directors of the SCA is responsible for approving the annual budget, ensuring the organization operates within its funding.

The SCA's resolutions contain specific guidelines and rules for regulated entities and market operations, providing clarity and consistency in regulatory oversight.

The SCA is set up as a public authority, independent from the government. It's run by a board of directors and reports to the Cabinet of Ministers.

The SCA's main goals are protecting investors, promoting fair market practices, fostering investment awareness, and ensuring the stability of the financial system.

The SCA's major functions include licensing market participants, setting rules for trading, and monitoring market activity to prevent fraud and market manipulation.

A Code of Conduct is a set of ethical guidelines and commitments that businesses are expected to follow to maintain a high standard of behavior in all their operations.

The SCA grants licenses to firms that want to participate in the UAE's securities and commodities markets. These licenses categorize firms based on their operations and responsibilities.

The SCA requires that all businesses operating in the securities and commodities markets implement strong accounting systems and controls to ensure financial transparency and prevent fraud.

The market's governing body can temporarily halt trading in all securities, specific company shares, or particular securities. This measure is taken in exceptional circumstances or when the market's stability is at risk.

The market's board decides to temporarily suspend or even permanently remove any regulations, rules, or procedures related to its operations, requiring the presence of a majority of board members.

The highest decision-making body in the market, composed of members who have paid their dues. They are entrusted with monitoring the overall market health and suggesting improvements.

The SCA can issue a warning, a notice to rectify the violation, a penalty, or even temporarily suspend the market's operations until the fee is paid.

A code of conduct for brokers, established and enforced by the market's board with the SCA's approval. It involves inspections to ensure compliance.

The market's board has the authority to temporarily suspend trading in the market, specific securities, or company shares, provided a majority of members are present.

The market's regulations stipulate that all securities and commodities prices must be displayed publicly, ensuring transparency and fairness.

Transfer of ownership of securities, registration, and custody agreements must adhere to the market's regulations, ensuring a smooth and compliant process.

The board of directors bears the primary responsibility for implementing the Corporate Governance Guide, including monitoring adherence to principles and rules, and making necessary amendments.

The company must keep records like minutes, reports, and documents related to its governance for at least 10 years. This is important for transparency and accountability.

To avoid even the appearance of a conflict of interest, board members cannot accept gifts that could influence their decision-making. However, small gifts or entertainment of symbolic value are permitted.

The Corporate Governance Guide outlines regulations on gifts, conflicts of interest, and transactions with related parties (like family members). These regulations ensure fairness and transparency.

A board member accepting gifts from those with a vested interest in the company can create a conflict of interest, leading to bias or unfair decisions.

Board members must disclose any potential conflicts of interest before participating in any decision-making process involving related parties, ensuring fairness and transparency.

Transactions between the company and its related parties (e.g., family members) must be conducted at arm's length, just like any other business deal, to ensure fairness and prevent abuse of power.

To prevent abuse of power and ensure transparency, related party transactions must be disclosed publicly and audited by independent professionals.

A professional who ensures a firm complies with all relevant regulations and laws related to securities and commodities trading. They act as an internal watchdog and protect the firm from legal risks.

The SCA requires firms providing ranking and advice services to have a Category Manager or Official. This manages their overall operations related to ranking and advice.

This professional analyzes the financial health of companies and assesses their creditworthiness. They often assign credit ratings based on their analysis.

Similar to a Credit Rating Analyst, but may have a more official designation or be accredited by a regulatory authority like the SCA.

This role focuses on identifying, evaluating, and mitigating financial risks within a firm. Their objective is to protect the firm's assets and minimize potential losses.

The SCA requires licensed firms dealing with securities to use a central system to manage their own accounts and their clients' accounts. This helps with transparency and control.

The SCA mandates electronic accounting systems for firms in the first licensing category (dealing in securities) must be able to be accessed by individual users based on specific permissions and logins.

This system is designed to ensure that all firms under SCA regulation have a secure and organized way to manage their finances and client accounts. This enhances transparency and security within the financial market.

Licensed bodies must disclose their legal status, including the fact they are licensed by the SCA, to be transparent and accountable.

Licensed bodies need to be aware of any state of emergencies and comply with regulations related to them, ensuring continuity of operations.

Licensed bodies must clearly state their physical address and registered office, making it easier for clients and authorities to locate them.

Licensed bodies must disclose any significant relationships with other entities (close ties) that could impact their independence or business operations.

Licensed bodies must follow the specific rules and regulations set by the SCA, including those related to accounting systems.

A specific accounting system tailored for firms dealing in securities, ensuring accurate record-keeping and financial transparency.

A firm must have a robust accounting system to track financial transactions, comply with SCA regulations and ensure transparency.

The SCA issues licenses for five categories of financial activities, each requiring specific capital adequacy requirements.